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Sunday, Jan. 18, 2009 | One of Mayor Jerry Sanders’ signature planned reforms — to slice the fat from city government by encouraging contractors to compete with public employees for certain city duties — could curtail the public’s access to records if private companies win the bidding.

The “managed competition” initiative approved by voters in 2006 has been slow to get off the ground because of, among other things, a successful challenge by organized labor.

But the mayor said in last week’s State of the City address that he plans to bring a guide to the City Council this year that will set the stage for open bidding on city services such as trash collection and graphic design. The cost-cutting initiative could gain greater traction as city officials work to close a $54 million budget gap.

If the private sector takes over some of those services, many records would be off limits to the public because those companies presumably would not be subject to the California Public Records Act, as are the city departments that perform those tasks now. The public’s access would largely depend on how much information the city requires in contracts with private companies and its diligence in collecting that data.

That could cut off access to individual employees’ salaries and keep secret exorbitant paychecks. Employee names likely couldn’t be obtained to check for undisclosed conflicts or past convictions. While city correspondence now can be used to trace the decision-making of city officials, if those services are outsourced, e-mails and memos between company officials newly responsible for those choices could remain secret.

Currently, city officials can be asked to compile details such as how many miles of streets have been repaired to determine the success of city programs. But if a city contract doesn’t require the right data from private companies, it could be difficult to judge their performance.

New Councilwoman Marti Emerald, a critic of managed competition, said she’s concerned about giving up free access to information. “When we outsource public works, we often outsource accountability,” she said.

The Mayor’s Office isn’t worried about the public records implications of privatizing city services. Spokeswoman Rachel Laing said city officials will make sure that outside companies are contractually required to provide relevant information to the city, which will in turn make those documents subject to the Public Records Act.

“We have dozens of contracts with private vendors who are not currently subject to the public records act, and yet we have not had transparency issues with these companies because public accountability is dealt with in their contracts,” Laing said in an e-mail.

There are no major California court decisions addressing whether citizens can request documents directly from private companies carrying out a formerly public function and being paid with taxpayer money, said Terry Francke, general counsel of the open government group Californians Aware. Francke doubts the courts would be receptive to such an argument because the law’s definition of an agency is fairly clear in that it applies only to private companies created by the government in order to exercise governmental authority.

“It’s not a functional test, it’s an organic test,” Francke said. “Where did this entity come from? Was it created by government? If not, then you’re not going to get much further.”

While members of the public won’t be able to request records from city contractors, they can access most documents that the contractors provide to the city. For instance, a member of the public or press could obtain from the city the correspondence between city officials and contractors, but the contractor’s internal correspondence wouldn’t be public.

San Diego County instituted managed competition in the 1990s to keep the county out of bankruptcy, and county officials don’t think the public records that are lost are important to oversight.

“To the extent there are e-mail communications that would have been between county employees that are now between two private contract employees, that would result in lesser access to e-mail communications,” said county Counsel John Sansone. “But in terms of what I would consider to be the most important things — communication between the county and the employee — that would be subject to disclosure.”

Another example of information that might be lost when a government function is taken over by a private contractor is individual employee names or salary information. The Mayor’s Office said the disclosure of the data shouldn’t matter if the company is staying on budget and following the living wage ordinance.

Francke said government agencies have wide latitude to control the flow of public information through the requests they make of contractors.

“If the person on the government side hires their brother in law and doesn’t want to accumulate detailed records, or for whatever reason if the government doesn’t demand information from the company, then there’s nowhere to go,” Francke said.

Laing said the example of the brother in law would be noted on a conflict of interest form. She said a thorough managed competition process, which includes review by an independent review board and approval of the City Council, will identify the relevant data that must be included in a contract.

“All pertinent information such as the contracts themselves, wages, licenses and certifications, background checks and whatever other information suits a particular service will be required by the city in the contract — and therefore available to the public,” Laing said via e-mail.

It’s not unheard of for a public agency to curtail its own access to information in order to sidestep the public records law. For instance, in 2000, a Wisconsin television reporter put in a request to the Milwaukee school district for the names of bus drivers employed by private school bus companies, which were required to give the district lists of their drivers every year. After a long court battle in which the contractors sued the school district to prevent it from turning over the information, the station ran a story exposing the criminal records of some drivers, including at least one who had been convicted of sex crimes.

The district subsequently amended its contracts to no longer require the companies to provide lists of bus drivers to the school district. Instead, school officials had the right to examine the rosters. Because the names were no longer in the hands of school district officials, they were presumably outside the reach of the public records law.

Though most states’ laws and court rulings don’t require private contractors performing a government service to fill public records requests, there are a handful of states that do allow for some direct access.

For instance, Georgia’s Open Records Act states that records received or maintained by a private entity “in the performance of a service or function for or on behalf of an agency … shall be subject to disclosure to the same extent that such records would be subject to disclosure if received or maintained by such agency.”

State laws that provide access typically distinguish between contractors providing service to a public agency and those performing services in place of a government entity.

In San Diego County — the local leader in outsourcing — officials say few if any of the services they’ve contracted out are really core government services. The county has outsourced some mental health services, but Purchasing and Contracting Director Winston McColl pointed out that the services the county now pays others to do include things like storing bulk food purchases in warehouses before selling it to county jails.

The services that the city of San Diego is looking to open up for bidding include trash pickup, street sweeping, greenery compost facility operations, and maintenance of streets, storm drains, traffic signals, street lights and sidewalks.

In the county, officials say they’ve saved more than $150 million through outsourcing and managed competition through the 2006-07 budget year alone.

Dianne Jacob, chairwoman of the county Board of Supervisors, hasn’t heard any complaints about public access to information. She said there’s actually more information made available during managed competition because of the scrutiny given to county operations during the bidding process.

“You can see how the private sector puts together its bid,” Jacob said.

Peter Scheer, executive director of the California First Amendment Coalition, said a government agency could always require a contractor comply with the public records law. But he’s never heard of that happening.

“Since one of the attractive aspects of contracting out is to get out from under the Public Records Act obligation, they’re probably not going to do that,” said Scheer, adding that he doesn’t think that’s the reason government agencies privatize.

Laing said such a practice would discourage small businesses to participate and diminish the savings to taxpayers. She said via e-mail that the “point of managed competition is to allow taxpayers to benefit from the efficiencies of private enterprise, not to burden private enterprise with the inefficiencies of government.”

The mayor is “confident the public will have access to all information germane to city contracts” without requiring full compliance with the Public Records Act, Laing stated.

Emerald said she isn’t sure whether requiring contractors to comply with the public records law is the answer, saying she’d like “a full vetting” of the legal issues involved. But she wants to require broad disclosure from potential contractors, especially their finances. If they don’t want to comply, she said, they don’t have to bid on the work.

“We’re offering them a stable contract, we’re offering them a source of revenue backed by the taxpayer,” Emerald said, “so I don’t think there’s anything wrong with having those contractors open their books.”

Please contact Rani Gupta directly at rani.gupta@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.

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